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Powerpuff Girl

By Carmen Aquino Sarmiento

Movie Review
Babae at Baril
written and directed by Rae Red

THE NOIRISH mood for Rae Red’s Babae at Baril (Woman and Gun) is set with Radioactive Sago’s Lourd De Veyra channeling a Beat poet in an artsy 1950s dive, as he nihilistically intones:

“Alak, sugal, kape, babae… araw-gabi, tumodo kami (Booze, gambling, coffee, women… day and night, without any let-up — it’s not as catchy in translation).” For the film’s first half, the soundtrack cooperates, heavy on the moaning saxes, squealing trombones and throbbing percussion.

The nameless Babae (Janine Gutierrez) stands for Every Woman, voiceless and put-upon. She meekly undergoes the various daily indignities that millions of Metro Manila’s minimum wage endo’s must endure: the lengthy queues to get a seat on a jeepney; the intrusive body searches by the company security guard. Her overbearing manager (Gie Onida) humiliates her repeatedly as he calls her out for her creased uniform and snagged stockings, implying that these may cause her to lose her job any day now. Her poor toes, abraded by the cheap, too-tight shoes she must wear while on-duty, never heal. Ms. Gutierrez is believable, with a touching vulnerability which should make us more patient with the “little people” who wait on us.

Every evening, Babae gets catcalled by the drunks she must walk by as she makes her way home. The slum landlord (Raffy Tejada) is a sleazy voyeur who spies on her roommate making out with her thug of a boyfriend. He threatens to throw Babae out on the street if she cannot pay her rent in full. The director Red sympathetically shows painful details in the hard-scrabble life of the working poor. Babae buys her sanitary pads tingi (by the piece). A good chunk of her small wages goes to supporting her demanding mother, who wants her to stay, homesick and lonely as she is, and keep working in the city where the money is better, while she makes lovey-dovey in the province.

Things come to a head when Babae picks up a loaded .22 in the trash. Power comes from the barrel of a gun. With an incongruous red sticker heart on its stock, the gun seems meant for the sweet-natured Babae. The director brings up the reality of male oppression even within the same oppressed laborer’s class. Babae’s co-worker (Felix Roco) makes friendly overtures, offering her a new pair of better-quality stockings. He clarifies that even though she has a choice between two pairs, he can only afford one. He insists that she try them on before him as he towers intimidatingly over her. She acquiesces which he takes as her consent to rape. Afterwards, he threatens her should she report him to the authorities. There is no solidarity in their common suffering.

Then follows an escalating series of events where, armed with the seemingly heaven-sent gun, Babae confronts her oppressors. One hopes for another satisfying rape-revenge film in the venerable tradition of the master Lino Broka (Angela Markado, 1980 and Babangon Ako at Dudurugin Kita, 1989) although the busted National Artist for Film Carlos Caparas who spawned the Massacre Movie genre might more popularly come to mind: (Vizconde Massacre: God Help Us, 1993; The Maggie Dela Riva Story: Why Me? 1994, and most recently Jacqueline Comes Home: the Chiong Story, 2018). Unfortunately, just as Babae is standing over her rapist, the director takes us into a long-winded back story of how the Baril, which is the second half of the title, came into her possession. If there were a case for cineaste’s blue balls, this is it.

The gun’s origin story goes as far back as Marcos Martial Law to the paltik-maker (underground gun crafters) then to its first owners: crooked cops-for-hire (Archie Adamos and Alan Paule). The gun passes on to Paule’s son, a second-generation policeman (J.C. Santos) who uses it as he goes after small fry in the Presidential War on Drugs: i.e., a lowly balut vendor (Elijah Canlas). His pleas to spare his life as he has exams the next day, evoke the Kian delos Santos murder. Balut Boy ends up with the policeman’s gun which he passes on to his friend, Steph, a newbie holdaper (Sky Teotico). On his first gig, Steph manages to shoot — and kill — in the darkness and from several yards away, the old woman (Ruby Ruiz) whose house he has broken into. Frightened, he runs off and dumps the gun (miraculously still fully loaded) in the trash for Babae to serendipitously find.

After that long history lesson, we are back to Babae, literally standing over her rapist who is too frozen by fear to move, with the gun pointing directly at him. From that distance of just a few feet, she fires all her bullets at him, on a downward trajectory yet — and misses! He comes to his senses and escapes unscathed. What are we supposed to make of that? A burglar handling a gun for the first time, hits his target in the dark with deadly accuracy, while a righteous woman misses on several tries at close range. One of the QCinema juror opined that perhaps Babae had a change of heart. He thought that was well and good, in keeping with the ideal of the soft, virtuous, ever compliant and forgiving woman. In this age of #MeToo and #BabaeAko, it is psychologically unsatisfying. There is a reason for the popularity of the rape-revenge genre.

But the puzzling change in the soundtrack from those boozey jazz riffs to the folk quartet Asin’s preachy “Magnanakaw,” when the film shifted to the baril’s backstory, should have tipped us off to the film’s dubious intent. The song’s lyrics definitely do not apply to the film’s protagonist though:

“Tingnan mo ang iyong sarili, suriin mo ang iyong ginagawa

Ikaw ba’y isang magnanakaw at taong mapagsamantala

Hindi nagpapapawis, hindi lumuluha

Ginagamit ang galing sa hindi tamang gawa.”

(Look at yourself and what you do —

Are you another thief and user?

Never sweating or shedding a tear,

Using your talents only for ill.)

The implicit message seems to be that women do not know how to handle power, especially when it comes from the barrel of a gun. So after all those great expectations and opportunities, the bad guys (all male) get away, and she is left empty and defenseless.

Farm lobby threatens lawsuits to force rice duties

AN agribusiness association said it will sue to force the government to impose safeguard duties against imported rice, contending that the safeguard duty investigation process was improperly terminated.

In a statement, the Philippine Chamber of Agriculture and Food, Inc. (PCAFI) said that the Department of Agriculture (DA) and the government’s economic team are “illegally” failing to protect farmers from foreign competition, and rejected as misleading their justification for not imposing additional duties to keep inflation in check.

“This is a diversionary tactic to protect those who benefited from this law which are importers. The ones favored by this law are not consumers… not farmers, but importers. They’re trying to divert us from the fact that so far the importers are the beneficiaries of the law,” PCAFI Director Elias Jose M. Inciong said.

“The government really looks down on farmers. It is in bad faith to even argue that safeguards are inflationary. They’re in bad faith for refusing to implement the law,” he added.

Section 7 of Republic Act (RA) No. 8800 or the Safeguard Measures Act authorizes government officials to make an initial determination that increased imports have caused harm to domestic industry. Any finding of unfair foreign competition must be issued within 30 days from receipt of the petition or a motu proprio initiation of the preliminary safeguard investigation.

The Implementing Rules and Regulations of RA 11203, or the Rice Tariffication Law allows the imposition of a special safeguard duty to protect domestic farmers.

PCAFI President Danilo V. Fausto said the P3-billion cash assistance to farmers, which the DA and he government’s economic team resorted to after terminating its safeguard duty investigation, is in itself a violation of the law.

“Farmers don’t plant to save the agriculture industry. They plant to sustain their livelihood, to have income. The government should now see farmers not as welfare beneficiaries, but as a business sector that needs to profit,” he said.

In response to the government’s position that it is looking after the interests of consumers, Mr. Fausto said: “Farmers are also consumers… farmers don’t have the money to buy (if they are made to accept low prices for their crops).”

Asked to comment, Agriculture Secretary William D. Dar told reporters, “There is no violation. That is their own thinking only.”

“Of course they will always have their own position, but government has to see the broader sense of things,” adding that safeguard duties can still be resorted to in the future, “at the right time.” — Vincent Mariel P. Galang

Sept. self-rated poverty falls; 2019 averages lower vs 2018

FAMILIES rating themselves poor were estimated at 42.3% of the total in September, inching down from the 45% in March but higher than the record-low 38% in June, the Social Weather Stations (SWS) polling organization said.

SWS said in a statement Monday that the families who responded that they were “mahirap” or poor in its self-rated poverty survey were equivalent to about 10.3 million families.

SWS said the non-commissioned survey puts the 2019 average so far is significantly lower compared to 2018 levels. “The resulting 42% three-quarter average proportion of Self-Rated Poor families for 2019 is 6 points below the 48% four-quarter average for 2018.”

The survey was conducted on 1,800 adults across the country.

SWS also reported that the self-rated poverty (SRP) threshold for September, or the minimum income needed for families to survive is P10,000, lower than the P15,000 SRP threshold in June.

About 29% of families or an estimated 7.1 million families consider themselves “Food Poor,” down from 35% in June and just above the record low 27% in March.

“The resulting 30% three-quarter average proportion of Self-Rated Food Poor families for 2019 is 3 points below the 33% four-quarter average for 2018,” SWS said.

The Self-Rated Food Poverty (SRFP) threshold is P5,000. This is lower than the P6,000 recorded in June 2019. — Gillian M. Cortez

National ID issuance to begin in April, Bangko Sentral says

ISSUANCE of the national ID will start in April, providing free access to a universally-recognized government identification card that is expected to make opening bank accounts easier and increase financial inclusion, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said.

Production of the national ID, formally known as the Philippine Identification System (PhilSys) program, is to be subsidized by the BSP, which hopes it will help reduce the numbers of the unbanked population, estimated by the World Bank at nearly 65% of the working-age population in 2018.

Mr. Diokno first disclosed the launch plans on Oct. 17 in a speech during the World Bank Group/International Monetary Fund (IMF) Annual Meetings in Washington DC.

“The card issuance will start in April 2020,” he said. “The journey for a national ID for the Philippines started 30 years ago. But it failed to pass one Congress after another. Finally, the Philippine ID System Act was passed last year,” he said.

The national ID is authorized by Republic Act. No. 11055 or the Philippine Identification System Act, which establishes a unified identification system for both Filipinos and resident aliens.

In a memorandum of agreement signed by the BSP with the Philippine Statistics Authority (PSA) on Oct. 7, the central bank agreed to produce 116 million blank cards over three years.

“We will print the ID at less than $1 per piece — 60 cents to be exact. We will provide the needed equipment and space for the embedding of personal information onto the blank cards, which will be done by the PSA,” Mr. Diokno said during a round table discussion on “Championing and Accelerating Good Digital ID for all.”

PSA Undersecretary Claire Dennis S. Mapa told reporters during the MoA signing that the formal rollout of the ID registration will have an issuance target of 14-15 million IDs in 2020, 50 million in 2021, and the remainder by 2022. Pilot testing started in September, and revealed that on average registration time might take less than the 15 minutes assumed during planning.

Mr. Diokno said during the MoA signing that the ID will be issued free of charge.

Banks are currently governed by Know-Your-Customer (KYC) rules which require two government IDs to open a bank account.

Many government IDs are issued for a fee, including passports, which require payment of at least P950 for non-rush processing. Securing government IDs are done for a fee. Among the costliest is a passport which can go from P950 for a regular processing.

The BSP’s own estimate of the unbanked population is 52.8 million adults as of 2017. — Luz Wendy T. Noble

Dominguez warns next crisis could wipe out inclusiveness gains

FINANCE Secretary Carlos G. Dominguez III said the global economic slowdown has the potential to undermine any gains made by poor countries to make their economies more inclusive.

Speaking in Washington, DC last week at the 102nd meeting of the ministers and governors of the Intergovernmental Group of 24 (G-24), Mr. Dominguez said: “If present trends continue, all the work we have put in preparing our economies for competitive trade, improving our domestic efficiency, and maintaining the highest standards for fiscal discipline will fail to ensure inclusive growth.”

A copy of his speech was released to reporters yesterday.

He expressed ”deep concern” that “47% of low-income developing countries are (in a state of) debt distress,” adding that developing aid across the globe likewise declined by 2.7% last year with official development assistance (ODA) to least-developed countries falling by 3%.

“With ODA making up two thirds of external financing for countries who are most in need, we express our unease with how relevant states and institutions are responding to the impending global economic crises,” he said.

“International cooperation is a means toward shared prosperity, not the subjugation of vulnerable economies,” he added.

He said the World Bank and the International Monetary Fund (IMF) should be innovative in helping emerging countries mitigate such risks.

“We call on the World Bank and the IMF to adopt bold, out-of-the box solutions in support of their efforts toward a ‘new multilateralism’ to effectively assist emerging economies in mitigating the impact of a changing global economic landscape fraught with trade tensions, protectionism and other factors that imperil global growth,” he said.

He said that the “traditional tools” that the countries continue to use are “insufficient, especially in dealing with disruptions to business models brought about by technology, trade wars, and changes in the supply chain models.”

“They should also closely collaborate with regional multilateral institutions as they have a more intimate understanding and appreciation of the socio-cultural and economic contexts of the member countries in the region and hence, their development needs,” he said. — Beatrice M. Laforga

Tree plantations, laws promoting FDI seen needed for wood industry

THE Philippines could be a leading supplier of wood if the industry were opened up to investment in tree farming as an alternative to cutting down standing forests, the Philippine Wood Producers Association (PWPA) said.

“One million hectares can produce something like 300 million cubic meters of wood, so we can be a global superpower in wood. But we have to get our act together,” PWPA Chairman Charlie H. Liu told BusinessWorld on the sidelines of the two-day Philippine Wood Expo 2019 in Pasay City.

He cited a report from the United Nations Food and Agriculture Organization, which projects global wood consumption growth of 2% a year over the next 10 years, with demand expected to hit 1.1 trillion cubic meters by 2030 from the current 900 million cubic meters.

He said the Philippines has nine million hectares of forest land, with the potential to generate P1 to P1.5 trillion worth of forest products and more than 200,000 jobs.

“We can take advantage of it, not just for domestic consumption, but for export. Look at Vietnam, it exported $5 billion in 2014, and this year they will be a $10-billion exporter of wood furniture. In the next five years they will become a $20-billion wood exporter,” he said.

He said that the government should work with the private sector to come up with laws that would attract investment in wood-related businesses.

“Work with the private sector and come up with relevant laws that would make it very attractive for investors to come in, invest into tree farming, and then protect their investment because it’s a 10-year commitment. Administrations change every six years, and you’ll never know what is going to happen. You need the law by your side,” Mr. Liu said.

He said that PWPA has been pushing the government to permit sustainable tree farming, which could generate P1 trillion annually.

“What we want to look into is sustainable tree farming, which is plantation forestry. This is where we can plant (trees) like cacao, rice, corn, and then make money out of it,” he said.

“If we plant one million hectares through sustainable tree farming, it can be a sustainable P1-trillion industry every year, or $20 billion every year,” he said.

According to the Philippine Statistics Authority, in August the Philippines exported forest products account for only $39.885 million of the $6.25 billion in total exports.

“In Asia, more and more people are getting wealthier, and they are consuming more wood products, and for us, nasa atin yan (it is our choice) to take advantage of it or not,” he said. — Vincent Mariel P. Galang

Gov’t borrowing falls sharply in Aug.

GOVERNMENT borrowing declined in August with reduced new borrowing across the board from domestic and external sources, while the existing-debt component saw net redemptions during the month, the Bureau of the Treasury (BTr) said.

According to its cash operations report, the BTr said borrowing in August was P73.23 billion, down 43.49% from a year earlier.

Total borrowing in the year to date was P802.504 billion. Of this total, 79.71% was sourced from domestic lenders, or P639.7 billion.

Net domestic borrowing for the month was P29.57 billion, down from P57.93 billion a year earlier.

BTr borrowed P60 billion via the Treasury bond auctions in August while it made P30.33 billion worth of net redemptions of debt owed to domestic creditors during the month.

Amortization amounted to P8.78 billion, P8.68 of which were sourced from the Treasury’s Bond Sinking Fund (BSF).

The government raised P43.67 billion from foreign lenders in August, P45.26 billion of which came from the Samurai bond market while P1.6 billion came from project loans.

This was offset by the P3.19 billion worth of payments made to foreign creditors during the month.

For this year, the government set a 73-27% financing mix favoring domestic sources to shield it from currency fluctuation in the global market.

The government is looking to raise P1.189 trillion this year from domestic and foreign sources to fund its budget deficit, which is expected to widen to as much as 3.2% of gross domestic product. — Beatrice M. Laforga

House bill seeks to set up banana research center

A PARTY-LIST legislator has filed a bill seeking to establish a banana research institute to develop better planting methods and find new uses for the plant, one of the Philippines’ leading fruit exports.

Rep. Raymond C. Mendoza of TUCP Party list filed House Bill No. 2622, noting that the banana industry pays about P1.78 billion in local taxes a year and provides income opportunities for some 30,000 agrarian reform beneficiaries.

“The industry has become a potent instrument of development and empowerment for almost two million residents of Mindanao who depend on it… It is ironic that the strategic value of the industry was built with little or no assistance from government,” Mr. Mendoza said in his explanatory note.

The measure hopes to establish the National Research, Development and Extension Center for Banana at the University of Southeastern Philippines in Davao City.

The research center will develop improved cultivars through traditional and biotechnological methods; develop efficient, economic, and productive banana production technologies; develop effective and efficient production systems for all banana varieties; discover productive banana-based farming systems; establish international linkages for banana research; and provide training for workers and farmers.

The bill provides for tax and duty exemptions for the research center, including on imported machinery. — Vince Angelo C. Ferreras

DoLE working on labor agreement with Slovenia

THE Philippines will soon sign a labor agreement with Slovenia that will open up at least 2,000 job opportunities for Filipinos.

In a statement Monday, Labor Secretary Silvestre H. Bello III said that Slovenia is open to an agreement with the Philippines for 2,000 to 5,000 skilled and semi-skilled workers.

“I told them that we first need to sign a bilateral agreement,” Mr. Bello said in a statement issued by the Department of Labor and Employment (DoLE).

A technical working group (TWG) will be created to draft an agreement with Slovenia, which is expected to take three months.

Slovenia is expected to take in nurses, engineers, truck drivers, heavy machinery and equipment operators, and household service workers.

Average monthly pay in Slovenia starts at $1,000.

“The salaries are definitely higher than that of the Middle East. In Saudi Arabia it is around $400. In Slovenia, we are looking probably at around P50,000 to P75,000 or about $1,000 as long as we can come up with a bilateral agreement and we both agree with the provisions and the template contract,” Mr. Bello said. — Gillian M. Cortez

A deserved tax break for working mothers

In February, President Rodrigo R. Duterte signed Republic Act No. 11210 or the 105-Day Expanded Maternity Leave Law (EMLL). The expanded maternity leave benefits under the EMLL are fully tax-exempt. This is the interpretation issued by the BIR in RMC 105-2019. Indeed, this is a deserved tax break for working mothers.

Under the law, all covered female workers in the private and public sector, including those in the informal economy, regardless of civil status or the legitimacy of the child, is entitled to 105 days of maternity leave, a considerable increase from the initial 60 days, or 78 days in case of caesarian section, with an option to extend for an additional 30 days without pay.

In addition, the law also mandates full pay. Under the old law, the maternity benefit does not add up to 100% of the employee’s compensation. It is computed only based on the average daily salary which is obtained by dividing the sum of the female member’s six highest monthly salary credits in the twelve-month period preceding the semester of contingency by 180 days:

Average daily salary = [(monthly salary credit x 6)/180]

The monthly salary credit, on the other hand, is based on the Schedule of Contribution of the SSS, wherein the maximum monthly salary credit for the year is only P20,000. The average daily credit multiplied by 60 days, which is the previous number of maternity leave credits, will be the total benefit due. Hence, this cannot reach the full pay.

Under Section I.j. of Rule II of the Implementing Rules and Regulations (IRR) of the Act jointly issued by the Civil Service Commission (CSC), Department of Labor and Employment (DoLE) and Social Security System (SSS), the term “full pay” is defined as:

“…actual remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hour not lower than the wage rate fixed by the Regional Tripartite Wages and Productivity Board (RTWPB) including allowances provided for under existing company policy or collective bargaining agreement, if any. Full pay in the public, on the other hand, includes the basic salary and allowances as may be provided under existing guidelines”

Although the law mandates full pay, this will still be partly shared by the SSS and the employer. The SSS will contribute based on the old formula on average daily salary. The payment of the salary differential representing the difference between the SSS-paid benefit and the employee’s basic pay, will be mandatorily shouldered by the employer.

Previously, payment of the salary differential was not mandatory and only upon discretion of the employer.

With the new law, female workers availing of maternity benefit will now receive full pay which consists of the SSS maternity benefit based on their average daily salary credit and the salary differential, if any. This ensures that the employee will still receive the equivalent of full pay while on maternity leave.

While employers are now required to pay the salary differential, the new law also listed certain establishments that may be exempted from paying the salary differential subject to compliance with certain requirements.

(1) Those operating distressed establishments;

(2) Those retail/service establishments and other enterprises employing not more than 10 workers;

(3) Those considered micro enterprises and engaged in the production, processing, or manufacturing of products or commodities including agro-processing, trading, and services, whose total assets are not more than P3 million; and

(4) Those who are already providing similar or more than the benefits herein provided.

Here lies the question: Will the salary differential continue to be a taxable benefit? Before the enactment of RA 110210, any salary differential given by employers is treated as a taxable benefit since the income tax exemption under the Tax Code only covers the SSS maternity benefits, i.e., the amount reimbursed by SSS to the employer. Unfortunately, there is nothing in the Expanded Maternity Leave Law that provides for the tax exemption of the salary differential.

In July, DoLE issued Department Advisory (Series of 2019) which provides the guidelines on the computation of salary differential of female workers during maternity leave and the criteria for exemption.

Under Item II. Computation of Salary Differential, the guidelines provide that the amount of salary differential are to be treated as taxable income of the female worker subject to the rules and regulations of the Bureau of Internal Revenue.

But lo and behold, with less than a hundred days before Christmas, the Bureau issued a memorandum circular to clarify the proper tax treatment of the salary differential to be paid by the employer under the 105-Day Expanded Maternity Leave Law. With the issuance of Revenue Memorandum Circular (RMC) No. 105-2019, the Bureau clarified that salary differential paid by the employer should be treated as tax-exempt benefits.

Based on the cited provisions of the new law, wherein the maternity benefit has been expanded from the previous 100% of the average daily credit to full pay or salary including the salary differential as its component, the BIR now interpreted that indeed the salary differential is considered a benefit. Under Section 2.78.1(B)(1)(e) of Revenue Regulations (RR) No. 2-98, as amended, the payments of benefits made under the Social Security Act of 1954, as amended, are exempt from withholding tax.

It is the Bureau’s interpretation that the salary differential is considered a benefit under the Social Security Law. Therefore, the Bureau concludes that the salary differential, in addition to the SSS maternity benefit, is to be exempt from withholding tax on compensation.

Another question being raised is the effectivity of the RMC. Will the adjustments be prospective or retrospective? Will it have the same effectivity as the RA 1011210 or the 105-Day Expanded Maternity Leave Law? The effectivity of the memorandum circular must be clearly stated for everyone’s guidance.

The simplest answer is this should apply prospectively to all female employees who availed of maternity leave credits on or before March 11, 2019, which is the effectivity of the Expanded Maternity Leave Law.

While childbirth is indeed a gift and a blessing to the family; it brings not only joy, but also entails some additional expenses. Having a newborn child would also mean additional expenses for their necessities — clothing, diapers, feeding bottles, vitamins, infant formula, and the like, not mentioning the cost of hospitalization. These additional expenses are just a few of the challenges new mothers and soon-to-be mothers are and will be facing.

With this recent issuance, somehow the weight of the additional expenses to be incurred by new mothers and soon-to-be mothers will be reduced, knowing that they can now receive their full salary, while they are on maternity leave, tax-free.

Christmas came early for those female employees who availed of maternity leave following the enactment of RA 101120 on March 11. Truly, it is a well-deserved tax break for working mothers.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Junaleen Magno is a senior of Tax Advisory & Compliance

division of P&A Grant Thornton

pagrantthornton@ph.gt.com

Somewhere beyond the sea

Last week the Philippines hosted the President of India, Shri Ram Nath Kovind, who came to Manila to address the India-Philippines Business Conclave and the 4th ASEAN-India Business Summit in Manila on Oct. 19. The night before, President Rodrigo Duterte tendered a dinner in his honor in Malacañan. A major player of that conclave and summit was the Philippines-India Business Council (PIBC) chaired by Johnny Chotrani.

At the Summit, President Kovind cited the significant potential for the Philippines-India economic collaboration. Both countries, he said, share mutual complementarities that could be useful to deepen trade and investment ties, such as the Philippines’ “Build, Build, Build” infrastructure initiative and India’s “Make in India,” as well as next-generation infrastructure programs. He was accompanied by a business delegation to explore new business opportunities; interact with government officials, local industry, and investment promotion agencies to obtain insights into the cost and ease of doing business.

Areas of interest were agriculture, health care, pharmaceuticals, IT, IT enabled services, electronics, innovation and business start-ups, and digital technologies such as digital payment, e-wallets, etc. Bilateral trade has shown continuous progress but the real gain has been collaboration in the IT-BPO sector. The digital age presents immense opportunities to fill e-commerce shelves, create fin-tech services, develop entertainment platforms, and power green and clean solutions.

The President said that in recent years, both countries have seen two-way investment growth in infrastructure and energy. More prospects wait to be converted into concrete projects, from airport terminals and LNG pipelines, to waste management solutions. The Indian pharma and health care sectors offer immense value to the Philippines. There is scope to enhance partnership in several other areas — from trade, investment, services, agriculture, engineering, to new technologies.

ASEAN is one of the most economically dynamic regions of the world today, and India has deep political and people-to-people relations with every member country. Kovind expressed the wish to bring ASEAN-India economic and business relations up to the same level. Although ASEAN-India trade, tourism, and investments have jumped significantly in the past few years there is still a long distance to cover to reach the target of $200 billion by 2022.

Although our ASEAN neighbors, linked by Asia’s land mass to India, are far more advantaged than us, collectively, not enough has been done to scale up business ties. ASEAN brings in better results from other regional blocs and bilateral ties where we’ve been successful in gradually reducing and eliminating trade and investment barriers. India has yet to benefit from ASEAN’s nominal GDP of $3.1 trillion and per capita income of $4,747. The effective use of existing mechanisms, like the ASEAN-India Business Council, can play a vital role in realizing this goal.

There are two billion people between India and ASEAN that haven’t been leveraged to date. We lack an economic partnership to create the policy and business environment needed to step up B2B linkaging and performance. Toward that end, the Regional Comprehensive Economic Partnership (RCEP) between India, ASEAN and its six FTA partners (China, Japan, India, South Korea, Australia, and New Zealand) is being rushed. RCEP is also open to any other external economic partners, such as countries in Central Asia, South Asia, and Oceania.

ASEAN-India trade has grown from $43.9 billion in 2010 to $81.33 billion in 2018. Indonesia, Malaysia, Thailand, Vietnam, and the Philippines account for 82% of total ASEAN trade with India. While the ASEAN imports over $1.2 trillion worth of goods from all over the world, India supplied only about 2-3% of ASEAN’s total imports; while its imports from ASEAN accounted for about 12% of total. India’s FDI flows to ASEAN were only $1.8 billion, or around 1.5% of total FDIs. Greater market access by both sides require amending negative lists in certain sectors and the successful conclusion of RCEP and other trade agreements.

I was in India last August as a member of the board of PIBC and as chair of the Philippine Council for Foreign Relations (PCFR). Business-wise, the Philippines is clearly at a disadvantage; it’s not part of the Asian land mass compared to most of ASEAN. But we’re connected by water: the Indian Ocean flows through the South China Sea and into the Pacific Ocean. India-PH joint ventures could radiate back eastwards to India and westwards to the Asia-Pacific region, which accounts for around 84% of our country’s total exports. Shipbuilding, pharmaceuticals, land transport, AI, space programs, and technical services are core areas of interest.

India’s “Indo-Pacific” concept, a term that gained currency in light of the strategic competition between the US and China, was another subject matter of interest. It’s a concept that’s still evolving depending on who you’re talking to. One version is focused on a military construct intended to oppose China’s militarization of the South China Sea and Belt-Road Initiative. ASEAN’s RCEP is more aligned to India’s, which is still in the process of crafting its own architecture.

Its foundations rest on a cooperative approach for these priorities: integrated economies, sustainable development of marine resources or blue economy, rules-based maritime order, international law and military deterrence. Its pillars would likely be maritime cooperation, trade and investments, connectivity, socio-cultural, science and technology, and the UN’s social development goals.

The Philippine government, if it hasn’t done so yet, should create an Indo-Pacific desk and tap the services of think tanks like PCFR to help craft an integrated approach for strategic alignment with the world’s leading economic and military powers. After obtaining official approval of the strategic plan, joint working groups on sectoral cooperation, e.g., maritime security, trade expansion, medical services, should be organized. All that eventually will require Executive-Legislative approval leading to an Indo-Pacific summit to formalize our alignment.

His thoughts on Philippines-India relations reached this high note: “I have no doubt that there exists a rich tapestry of our shared heritage waiting to be researched and documented. The discovery of the statue of Tara in Agusan and the commonality in our languages and thought speak of vibrant cultural exchanges in the ancient past. And much to our delight, our contemporary cultural attributes, be it music or dance, Karaoke or Kathak, continue to bring our two peoples closer.”

 

Rafael M. Alunan III is a former Secretary of Interior and Local Government and chairs the Philippine Council for Foreign Relations.

rmalunan@gmail.com

map@map.org.ph

http://map.org.ph

On the future of business

The title of this essay was the main theme of the recently concluded 17th Management Association of the Philippines (MAP) International CEO Conference 2019 which was held at the Makati Shangri-La. This piece is intended to interject our own impressions and perceptions on this vision statement which we hope will complement those of the many informative and insightful presentations made at the Conference.

To our minds, the concept that captures the principal thrust of the Conference, one that we believe is the common thread that brings the diverse presentations into coherence, is the notion that in today’s complex, fast-changing, and uncertain economic environment, business should pursue sustainability as its major strategic concern.

This is easier said than done, however, because the term “sustainability” has many shades of meaning and is subject to many interpretations. From an environmental and ecological perspective, sustainability means the continued co-existence of human society and the larger physical and biological systems in which it is embedded. When we speak of “sustainable development,” we usually have in mind our ability to pursue our human development goals — for example, those embodied in the UN’s Sustainable Development Goals — in a manner that preserves our ability to continuously draw resources from the planet and the larger ecosystem.

From a narrow, institutional point of view, sustainability simply means the ability of a social entity or an organization to survive over an extended period of time. It is in this narrow context that we discuss sustainability as business strategy.

The presentations at the Conference have shown that in order to thrive in an increasingly hostile and volatile environment, an organization must develop its ability to draw resources from the different segments of its environment on which it depends for its sustenance, notably its consumers, its workers, its business partners, and the community of which it is an integral part. Moreover, to survive in a world which is characterized by frenetic and unpredictable changes in technologies and markets, and dramatic transformations in the social, economic and political milieus, organizations should develop the capacity to adapt.

These, then, are the three essential elements of strategies for sustainability: a long-run perspective, a focus on stakeholders, and an emphasis on adaptation through innovation.

In his keynote address, Henry K. H. Wang stressed the relationship between business sustainability and sustainable development, suggesting that the fundamental logic behind strategies for sustainability is that business cannot long survive in an unsustainable environment.

By definition, a strategy of sustainability implies a long-term time horizon. Conference speaker Andrew HW Chan suggested that business should aim for the maximization of economic value rather than the maximization of short-term profits. In setting the tone for the Panel Discussion portion of the conference, MAP’s Alma Jimenez suggested a shift in focus away from shareholder wealth towards the economic well-being of the firm’s other stakeholders as a way of realizing long-run business objectives.

In the exchanges that followed, the various discussants narrated how organizational sustainability can be achieved by creating value for stakeholders. Illac Diaz, founder of the Liter of Light Foundation, showed how an innovative technique for producing solar lights by recycling used plastic bottles and converting these into light bulbs using simple solar panels as a source of energy can create value not only for customers but also for entire communities. Jeannie Javelosa, prime mover of the Great Women project, implemented in collaboration with the Philippine Commission on Women, showed how this social enterprise has succeeded in giving access to the world of fashion to products of women in poor, inaccessible rural areas of the Philippines.

Both initiatives are in keeping with Deepa Prahalad’s advocacy of “bottom-of-the-pyramid” strategies for achieving traditional business objectives by sharing value with those who contribute to the process of value creation, and who have a legitimate stake in the business enterprise — those, in particular, who are the least economically endowed in society.

We have noted elsewhere that one of the greatest anomalies of our time is the ever-widening gap in income and wealth between the very rich and privileged few in most societies, and the masses at the bottom of the social pyramid that are mired in abject poverty. Most social analysts regard this continually widening gap as unsustainable. The rationale behind sustainable strategies, along with Deepa Prahalad’s concern for the well-being of the bottom of the pyramid, suggests that it is in the long-run strategic interest of business to address the issue of non-inclusive growth.

The shareholder-stakeholder issue that unraveled at the Conference suggests that there is no inherent conflict between long-run shareholder wealth maximization and creating value for stakeholders, as both Andrew Chan and Ms. Jimenez have advocated. What it does suggest is that value shared with stakeholder should be treated not as costs to be minimized, but as investments intended to enhance future productivity. In this way, the business enterprise will be able to produce higher economic value in the future and enhance the residual value that goes to shareholders.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.

 

Niceto S. Poblador is a retired UP Professor, and until recently was Professorial Lecturer at the UP School of Economics.

map@map.org.ph

nspoblador@gmail.com

http://map.org.ph

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